Tutorials:Smart Contract

Quest: Smart Contract

We have seen that Tether (USDT) is one of the top-valued cryptocurrencies, and it operates as a digital asset on the Ethereum network.

• Tether does not have its own blockchain—it uses the Ethereum blockchain to function.
• Tether is controlled by its smart contract.

Let’s use Etherscan to explore Tether's smart contract:

Tether Smart Contract Code

Exercise

Observe the contract page, which has three main fields:

1. Overview: Displays the Ether balance and token holdings (digital assets other than Ether).
2. More Info: Shows the contract creator and provides a link to the Token Tracker Page.
3. Multichain Info: Indicates if the smart contract exists on multiple blockchains.

Steps

1. Scroll down to the Contract Source Code tab.
2. Click on the green Audit Report button.
3. Click on the Security Audit Report link.
4. Scroll down to Section 2.1 Owner Privileges.

Task

To complete this quest find the word hidden by the rectangle in the picture below:

Remarks:

This exercise highlights the importance of security audits for serious cryptocurrency projects. Security audits are conducted by experts and are made public to ensure transparency.

In Section 2.1 (Owner Privileges), observe that the creators of the USDT contract have control over various functions:

• The ability to make changes to the contract.
• The ability to blacklist specific addresses, freeze transactions, and more.

USDT is very convenient to send payments and avoid market volatility, but all those "owner privileges" make it a dubious store of value, since they can do whatever they want with your money. Same as banks, so it is not so bad, but still... Not what Crypto is all about.